The roles of chief executive and head of paid service are separate. Whilst private law governs arrangements between local authority chief executives and their employers, designation as head of paid service under section 4 of the Local Government and Housing Act 1989 comes under public law.
These intertwining complexities were examined under bright judicial operating theatre lights by Judge Roger Kaye QC on 25 July 2012 when he considered the lawfulness of the dismissal by Leicester City Council of its former Chief Executive, Sheila Mary Lock in R (Lock) v. Leicester City Council  EWHC 2058.
As outlined in Local Government Lawyer on 30 July 2012, in January 2011 former MP for Leicester (and former Leicester City Council leader) Sir Peter Soulsby announced his intention of standing for the proposed new office of directly elected Mayor of the City Council. His election platform included the proposed abolition of the post and role of chief executive on the basis that the Council did not need both an elected mayor and a chief executive. Sir Peter was in fact elected Mayor on 6 May 2011 and Ms Lock (the Claimant) was informed by telephone and letter of intentions to consult on proposals for the abolition of the chief executive post.
Following this, on 2 June 2011 the Council’s Employees’ Committee (chaired by Cllr. Rory Palmer who had been the Mayor’s election agent), having considered a short business case on the abolition and redundancy of the chief executive role and restructuring of senior management posts, resolved that the proposals should proceed and gave the Mayor and Cabinet seven days to object. There were no such objections. On 29 June 2011 the Employees’ Committee (again chaired by Cllr. Palmer) noted the absence of objections from executive members and that a special full Council meeting was to be arranged to approve the decision to delete the Chief Executive post in line with relevant regulations and as necessary act as the appeal stage in relation to the Committee’s decision.
The Council’s Director of Human Resources then on 8 July 2011 wrote to the Claimant (the letter being headed ‘Notice of Redundancy’) purporting to give her 4 months’ notice of redundancy dismissal. This letter was nevertheless expressed to be ‘subject to approval by full Council’ and indicated that at its proposed meeting the Council would ‘not only consider whether or not to approve the decision to delete the post of Chief Executive but also any appeal. . .from you regarding the decision of the Employees’ Committee to delete the post of Chief Executive. . .’.
The Council meeting in question went ahead on 4 August 2011, commencing at 1700 and lasting until just after midnight. The Judge said it was ‘clear there was a very full and anxious debate extending over seven hours. . .’. This resulted in a decision to dismiss the Claimant’s appeal against abolishing the Chief Executive post, to approve her redundancy dismissal and to appoint the deputy Chief Executive as temporary head of paid service pending a senior management review.
Another dimension was that the Claimant had been suffering from work-related stress owing to a sustained campaign of abuse from a Council employee who was subsequently convicted and imprisoned for harassment for this. At a press conference following the Mayor’s election the Director of Human Resources informed the media that the Claimant was off sick and would be so for at least a further four weeks.
The judge noted from Lord Bingham in McLaughlin v. Governor of the Cayman Islands  1 WLR 2839 that if a public authority purports to dismiss a public officer holder ‘in excess of its powers, or in breach of natural justice, or unlawfully (categories which overlap), the dismissal is, as between the public authority and the office-holder, null, void and without legal effect, at any rate once a court of competent jurisdiction so declares or orders. . .’.
As to statute, Schedule 1 to (and the substantive) Local Authorities (Standing Orders) (England) Regulations 2001 (S.I. 2001 No 3384) were relevant. Under Regulation 5 ‘the power to approve. . .dismissal of the head of the authority’s paid service shall be exercised by the authority itself’. Where a committee, sub-committee or officer is discharging this function, paragraph 4(1) of Schedule 1 requires the authority to approve dismissal before serving notice. And under paragraph 6 of this schedule specified details of any proposed dismissal must be notified to the proper officer and to every member of the authority’s executive. In addition, there must either have been no objection to the dismissal from the elected mayor (or any other executive member) or if there were such objection from the mayor, this was either immaterial or ‘not well-founded’.
Under section 4(1)(a) of the Local Government and Housing Act 1989 every relevant authority (including Leicester) must designate one of its officers as head of paid service. That officer has specified reporting duties under section 4(3) and (4).
There were five heads of challenge to the Council’s decision:
(i) The letter of 8 July 2011 (headed Notice of Redundancy) contravened paragraph 4(1) as above in purporting to dismiss the Claimant before requisite Council approval.
(ii) Process unfairness contrary to Article 6, given that the Mayor had already announced his pre-determined intention to dispense with the post of chief executive.
(iii) Bias in involving Cllr Palmer as chair of the Employees’ Committee when he had already supported abolishing the chief executive post.
(iv) Failure to consider whether the post abolition could be justified financially – the premise on which abolition was based.
(v) Unfair disclosure of the Claimant’s personal circumstances – in particular her medical condition in breach of her Article 8 rights.
The Judge firstly noted that a clear distinction must be drawn between the Claimant’s contractual position as Chief Executive and her statutory position as designated head of paid service. In the Claimant’s case her contractual position also included her statutory designated function. However, the Court on judicial review was concerned with the public office as a matter of public law and not the private law issue of contractual employment. Judicial review is also generally a remedy of last resort and the Administrative Court is slow to interfere where the Claimant has an alternative remedy before another forum (as does the Claimant in the Employment Tribunal).
The Court considered Ground 1 (above) to be ‘the real core of this case’. The letter of 8 July 2011 was certainly ‘ill-judged and not well drafted. . .having been headed “Notice of Redundancy” which was not open to the Employees’ Committee’. The matter needed to be either determined or approved by the full Council.
Nevertheless, a review of the entire process showed that the Council had been keen to try and get things right both as a matter of employment law and statute. Part of the problem was the overlap between the contractual role of chief executive and the statutory function of designated head of paid service. The statutory functions attaching to the designated head of paid service could not be ‘deleted’ since they are a statutory responsibility. The person so designated, however, could only be dismissed provided the correct 2001 Regulation procedures were observed.
But whilst the Judge had sympathy with criticisms of the ‘infelicitous and ill-judged language and drafting’ of the 8 July 2011 letter, he pointed out that it had to be remembered that the letter is ‘just that’. It is ‘not a lease or mortgage and must be read reasonably and sensibly and in context as it would be understood by a reasonably person receiving it with relevant knowledge’. In the circumstances, the ‘whole implication of this unfortunately worded letter’ was that whilst the decision to abolish the post of Chief Executive was supported by the Employees’ Committee, the decision on that was for the full Council. And since the abolition would lead to her redundancy and termination of employment that also invoked the 2001 Regulations since she was the designated head of paid service. That also was a matter for full Council and indeed the Claimant’s internal appeal documents were placed before Council which made the relevant determination. Ground 1 therefore failed.
Grounds 2 – 5 had no more success. As to 2 and 3, since the proper focus was on the Council meeting of 4 August and since both the Mayor and Cllr Palmer had absented themselves from both debate and vote on that occasion these foundered. On Ground 4, the Claimant had had every opportunity to put her case to the Council and did so and there was also ‘every indication that the council gave careful and detailed consideration to the policy question’ of whether the role of chief executive should be retained or not. And to the extent that Article 6 was engaged, the Judge considered that the Claimant ‘was given a very fair hearing overall’.
Whilst (per Ground 5) disclosure of the Claimant’s medical condition should not have happened, this did not vitiate the whole process and the Ground consequently failed. In fact the Judge ventured the tentative view that there was even an arguable case that as the Chief Executive of a public authority there was a legitimate interest in knowing at least in general terms that she was ill.
In the circumstances, there had been no material irregularity, unlawfulness, unfairness or irrationality in the decision to dismiss the Claimant as Chief Executive and designated head of paid service. The Claimant had had a full opportunity to make representations to the Council which had considered and debated them carefully and at length.
At one point during the legislative gestation of the Localism Act it seemed that mayoral chief executives were the coming thing (and I expressed some corporate governance concerns in my 24 February 2011 article Doppel und Spitze!). However, the mandatory proposals never in fact made it into law, having been dropped by the Government in June 2011. But clearly, whilst authorities are free to abolish chief executive posts locally (if they do so properly), the Lock case is a reminder that they cannot do away with the statutory function of head of paid service. And if an authority does wish to dismiss the officer designated as head of paid service this needs to be carefully in line with the 2001 Regulations and other legal requirements.
In reality the functions of senior politician (elected mayor or otherwise) and non-political chief executive are different and there are many examples of successful top leader/chief executive teams (Sir Richard Leese and Sir Howard Bernstein of Manchester City Council being one). Apart from essential working chemistry, the key is for each to recognize the different, individual attributes each brings to the authority and for one not to try to be the other. Because if for practising politicians to dabble in management is to tango on a minefield, then for chief officers to trespass over the political divide is to court a sharp downward Snakes and Ladders slide.
But as austerity becomes ever more austere, there will inevitably be more and painful changes and experimentation at top authority table as politicians search for increased savings and the philosopher’s stone that will turn base electoral perception into ballot box gold. Lock illustrates the care required when such attempted alchemy has legal consequences. However, the story is not yet over. For a new chapter, headed ‘Employment Tribunal’, has yet to be written.
© Nicholas Dobson August 2012.